Tuesday, January 09, 2007

Retirement Savings Burnout

Every once in a while I just feel depressed about trying to save for retirement. For example during the income trust disaster last Oct, I got hammered in my taxable account and I still had some expenses related to my move in the summer draining the last of my savings. I felt broke and was wondering what is the point of trying to save when something just happens to mess it all up.

At times like this there is no one size fits all solution. Some people get a good night sleep and feel better. Others play with the kids or visit some family or watch a movie. In my case, I find I often have to take a break from the retirement planning books and stop playing with savings calculators. Once I have some distance from it all I tend to feel a bit better.

There is only two truly bad ideas on how to feel better: spending your way out it or stop saving. Both are doomed to create more problems in the long run. After all getting to early retirement is a bit of a marathon. You save for years to reach your goal and sometimes that finish line might as well be at the other side of the globe. For some people, short term goals can help avoid burnout. First save $100, then $1000 and then $10,000. Small steps that keep you heading in the right direction. I've read from numerous people that the first $100,000 is the worst to save and after that you really start to see compounding work its magic.

So don't worry if you feel a bit of burnout while saving once in a while. It's hard work some days, but the payback will be worth it.

1 comment:

Canadian Dollars said...

I'm at about 70K right now and will need about a year and a half of saving before I hit the magic number of 100K. The best plan to follow is consistency. Put a little bit away here and there and soon your nest egg will increase.